There has been much confusion about the concept of hospital insurance plans which offer the beneficiary a daily cash remuneration for each day in hospital. These insurance plans are not medical aid hospital cover. Most private hospitals in South Africa will not recognise these insurance plans as being suitable financial backing for medical services and you will still have to pay cash upfront at the hospital. A medical aid on the other hand is a registered medical finance provider and will be accepted by most private hospitals.
Advantages and Disadvantages of Hospital Cash Plans & Medical Aid Cover
These financial products are significantly different, with medical aid catering for your health care costs, while the hospital cash plan assists with your cash flow if you are hospitalised and unable to work. If you are looking at a medical aid’s hospital cover, this is still not a hospital cash back plan. A medical aid’s hospital cover will pay for your medical bills, like the doctor’s fees, hospital expenses and so on directly to the service provider.
It is important to consider all your options, if you can only afford one of these plans.
- A medical aid covers the costs of your day-to-day medical expenses, chronic medication and hospitalisation costs. A hospital plan gives you cash back if or when you are hospitalised.
- A medical aid pays the doctors, pharmacy, hospitals and other medical service providers for your health care needs. A hospital cash plan pays you the money directly.
- A medical aid pays for most of your medical expenses as per the NHRPL (National Health Reference Price List). A hospital cash plan pays a set amount as agreed upon at the start of the insurance.
- Hospitals and doctors recognise medical aids a a form of surety, in that they will be reimbursed for their services. Hospital cash plans are not recognised by any doctor, pharmacy or hospital.
There is no replacing a medical aid with a hospital cash back plan and vice versa. They are two separate products with separate pro’ and con’s. However an important point to consider is that private health care in South Africa is expensive and a medical aid is geared to covering these costs.
For example : If you have a heart attack (myocardial infarction) and need a bypass, it may cost you in excess of R150,000 for all the medical costs, including doctor’s fees, hospital care and so on. This will be the cost of your care for just 10 to 15 days of hospitalisation and includes doctor’s fees, surgery, related tests, drugs and treatment. A private hospital may ask you for a deposit of up to R50,000 before admitting you within their facility and if you are unable to pay, you will be transferred to a public health care facility (government hospital). The hospital and doctor will not recognise a hospital cash back plan as a financing option for your health care needs. Even if your hospital cash back plan paid you R1,000 a day for every day in hospital, in the event of a heart attack, you may only get R15,000 from this insurance plan. This will not be sufficient to cover your hospital bill.
However if you have the budget, it is worthwhile investing in a hospital cash plan in addition to your medical aid cover. While the medical aid will cover your health care expenses, a hospital cash plan will provide you with an income when you are hospitalised. This will allow you to meet all your personal expenses and take care of your family even when you cannot work.
Ensure that you speak to your insurance broker about all the terms and condition as some hospital cash back plans will only provide cover for a specific number of days per year. Also bear in mind that a hospital cash back plan will not cover you if you are sick and recovering at home. It is only valid for the number of days for which you are hospitalised.
Medical aids in South Africa can be quite pricey but offer a service that is unmatched by any other insurance product. If you have concerns about medical aid prices, it is advisable to consult with a broker to discuss cheaper cover. These budget medical aid plans may have certain exclusions and restrictions but will still offer you a level of health care cover that is superior to traditional insurance cover.